Post Office drawn into rates row after its financial partner Bank of Ireland hikes mortgage payments for thousands of borrowers

The Post Office will face criticism today in the wake of the decision by its financial partner, Bank of Ireland, to double the rate of thousands of mortgage borrowers to 4.49 per cent.

The increases apply to Bank of Ireland customers, not borrowers under the Post Office brand.

But they have sparked a furious reaction, including demands from Andrew Tyrie, chairman of the Commons Treasury Committee, that the Financial Services Authority explains why it has permitted the increase.

A critical response is due today from the FSA, which is likely to embarrass the Post Office over its links to the Irish lender.

Bank of Ireland borrowers with a tracker mortgage believed their rate could only go up if the Bank of England’s base rate increased and, since March 2009, it has not moved.